Executive Search Update
- Sep. 01 2005 00:00
The Russian market is maturing in all aspects, competition is growing rapidly and business practices are becoming more sophisticated.
Human resource management, including executive recruitment and development is no exception to the trend. In order to succeed in building the optimal organization it is no longer sufficient to rely on what has been called the “administrative resource.” Human capital is becoming an increasingly important factor and companies are investing more and more in people and personnel management. As a result we have seen a growing trend in demand for world-class human resources directors and a raise in their compensation levels.
Another predictable trend has been continuing demand for sales and marketing specialists. Russian companies know how to produce; now they are learning how to market and sell their product. This has been particularly true for fast moving consumer goods and retail sectors.
Inger Talvitie, Head of the
Moscow Office and Director
of Executive Development
Retail financial services have continued to explode with a significant number of Western market entrants such as Banque Societe Generale Vostok, GE Capital and Intesa, as well as with existing players expanding rapidly, for example Citibank hiring 100 people a month for its retail operations. All major Russian banks have also identified the retail banking services to be the next big growth area and are building up their networks accordingly. There is such a shortage of qualified personnel at all levels that salaries are skyrocketing. Banks are forced to hire junior people and train them up only to risk losing them to better paying competitors.
Large industrial groups have started to develop internal corporate finance and structuring capabilities to allow them to restructure their often randomly accumulated assets. Quite a few major industrial companies such as SUAL and Rospromavto attracted professional corporate financiers in order to optimize their holdings.
Another emerging trend is the start of the debate on entrepreneur vs. professional manager. As is the case in the more mature Western markets the discussion is lively on the question if and when the person having built the company should delegate to professional managers. As this discussion is growing and delegating becoming inevitable, the demand for executive directors and professional general managers is growing at a fast pace.
Entrepreneurs and business owners are trying to withdraw themselves from the day-to-day management and focus on strategic development or retire altogether.
Very often companies cannot find the required skills in the Russian market and have to look globally. Ideally they want Russian nationals with work experience in the West, but sometimes they are ready to sacrifice the language ability for knowledge and experience. The majority of our searches are not limited to Russia but are truly international.
It gives a lot of satisfaction to bring Russians back home. It is becoming easier now as Moscow is becoming a real cosmopolitan city and as the market offers more challenges and opportunities, even more so than the Western markets where careers are much more regulated and predictable.
In Russia you can skip several steps and become a general manager of a paper mill or power plant at the age of thirty. The learning curve is much steeper and career advancement faster.
Over the coming years many Russian companies are looking to attract foreign capital through transactions in the international financial and equity markets either through getting strategic investors or doing an initial public offering (IPO).
These companies are thus looking for professionals with prior relevant experience in emerging markets. We see that primarily in the areas of finance professionals, accountants with knowledge of international accounting standards as well as independent directors.
New focus for executives
In the more competitive environment most organizations understand that they have to strive for higher productivity and lower rates of employee turnover. It is both expensive and time consuming for corporations to recruit new talent and many organizations are instead introducing measures to retain their top professionals and growing their own talent through implementing succession planning systems. One of the key challenges is to identify, develop and retain outstanding individuals who are able to deliver superior performance, both individually and as part of a team. Many companies set up mentoring programs and some introduce coaching as part of the continuous personal development. Apart from developing the talent these programs help identify and track the talent.
It is clear that financial reward is not the only way to attract and retain top professionals. In the increasing competition for top talent employees and candidates have started to put more weight on non-material and long-term benefits.
For example, career planning and progression, and both personal and professional development opportunities — including core technical and the more soft leadership and organizational skills are often emphasized by top candidates.
Therefore, as part of their succession plans, more and more companies are using learning and development programs and executive coaching to build up leadership skills, retain key executives, and ensure that their executives deliver the leadership the company requires. This leadership capability is a significant investment and directly tied to success and profitability for most organizations.
In general, executives need less formal training but as a growing trend we have seen the requirement for more objective and sustained feedback with a thought partner — a sounding board — someone who generally cannot be found within the organization.